I must admit, i think i hate what the word marketing has come to represent. Marketing people (and i think the general public) think it represents advertising, direct mail, persistent one-to-one communication (aka bombardment), cookie ridden snooping, inbox flooding SPAM etc etc etc. Delete delete delete… It sounds as popular as the word politician and banker. But really it is so much more, so much more intrinsic to us all.
I am still learning (in my current role as CMO for Movebubble), every day the enormous role that marketing plays in any business. From customer listening, value setting, branding, message, tone of voice, social engagement, competition analysis, revenue streams, User Experience, product development and the list goes on. And, one might ask… what does that all means Logan?
I think the one thing that many business are so focussed on is B2C (business to consumer). I once wrote in another blog post that it was P2P (what i called people to people). I thought i was so clever… When i wrote this original blog post I had still envisaged a member of an organisation speaking, albeit as a person, to a customer (also another person). However since this P2P insight I have come to realise that the most crucial and valuable form of brand ‘marketing’ comes from personal recommendations i.e the interactions between your customers. Its C2C (customer to customer) as Mark Earls suggests in Herd; a book about how humans are built to interact; is the most important thing to understand and focus on.
‘I’ll have what he’s having‘ is how we are made. Its Cognitive Ease (did i just coin a phrase?)
We don’t like making decisions, hence we always take the easiest route… mentally that is. We are down right lazy. Again as Mark Earls says, we are homo-mimicus. We like to copy, its a survival instinct. I do listen to my friends and will often go the same movies as them, buy the same beer, eat at the same restaurants. So how does a company get into this, personal space. And should it? If it tries does it really just turn people off.
If your business is good enough, and performs a task beautifully and easily then is this enough to generate WOM (word of mouth) or as marketers now like to say ‘word of mouse’. The role of marketing is today; in my humble opinion all about lubricating the wheels of C2C communication. I am not sure there are any answers (that is that i have any), but i hope this makes you think a little about the role of marketing these days.
This blog is for me to put ideas out and see what people think. Engage and open up lines of dialogue. If any one has any thoughts on this, please let me know.
And on that note… “Waiter, can i have what he is having…?
Ok Ok, if you don’t know about this then you need to. Watch this unbelievable documentary called “The Smartest Guys In The Room” about the Enron Scandal from 2001.
Enron was an American company based in Houston, Texas, founded by Kenneth Lay, and traded in energy. The company performed all manner of dubious activities, and artificially drove up the price of energy, capped the retail price for electricity and even caused region wide blackouts, dubbed the Californian Electricity Crisis.
The company performed large scale accounting fraud, hiding billions of USDs of debt, with Arthur Anderson and thus provided vastly inflated share prices at the time. The scandal was revealed in October and as you can see from the graph the share price plummeted (even though it had been decreasing for a while).
All this criminal activity eventually led to the largest bankruptcy reorganisation in history (a USD40 billion claim from shareholders) of the whole Enron Corporation alongside the dissolution of Arthur Anderson which was the largest audit failure ever. Just a side note, this was the largest bankruptcy in history until that of WorldCom the next year.
This documentary will illustrate all the key points, and is certainly worth a watch if you have about 1.5 hours (109 minutes to be exact). So go get a cuppa and sit back to learn about one the largest corporate frauds in human history.
The Smartest Guys in the Room (well not that smart…) – this is only the trailer as the whole video has been removed from Youtube 😦 But i strongly advise you to do some digging so you can watch.
I was sat in a meeting the other day, talking about software requirements. And we began talking about ideas of branding and how ‘advertising’ has changed. Its no longer about repetitive bombardment from billboards and placards. Advertising in my opinion does not do ‘maketing’ justice. Marketing is about demonstrating the core values of why you do business and ensuring alignment with customers. Its not about blag or smoke and mirrors. Its about well timed, relevant content and engaged communication to ensure maximum comprehension and efficacy. Its about being human. Scott Stratton talks a lot about this. Definitely worth checking out and finding on twitter too @unmarketing . So stop advertising and start talking.
Anyway i digress ever so slightly… So we spoke of Customer Relations Management Systems (“oh the joy i hear you shout”). CRM we then thought could mean something else, and we explored the idea of ‘Contextually Relevant Marketing”. I am sure this is not coined here, i just thought it was really cool and i wanted to blog about it. The idea that a brand should be engaging with you at the right moment, with the right content. The lines between customer and company are blurred these day, and i think those companies that cannot leverage this ability to engage will always fall short of the mark. I believe that most companies dont get this, they still act on the opposite side of the fence to the customer. The problem is, there is no fence anymore. Be your company.
Just some sunday afternoon ramblings having watched Andy Murray win Wimbledon. Fair play.
This is a great little video about coding, and how it is not taught in schools (in this instance US schools – but i think we can assume in general).
Steve jobs quotes:
“Everyone in this country should learn how to programme a computer… because it teaches you how to think.”
I love that. I dont code. I want to learn how to code. I can certainly see how Drew (just the guy who created Dropbox) suggests it is similar to learning how to play an instrument in terms of the learning experience because coding is about pushing the realms of possibility. I want to be able to think of something, create something and then publish… Its exciting.
It’s amazing to see this new wave of tech engineering jobs (or lively hoods i prefer) being available but the skill base actually not even being there. This is an amazing thing to actually think about. I want to learn to code, as its the future. How cool is that. This video made me want to learn to code.
And the offices in this are so damn cool too. I love that i saw this question on the wall. Its now written and hanging above my computer.
“What would you do if you weren’t afraid”
So check out the video below. And if anyone has any ideas as to the best way to learn how to code, let me know.
Starring Bill Gates, Mark Zuckerberg, will.i.am, Chris Bosh, Jack Dorsey, Tony Hsieh, Drew Houston, Gabe Newell, Ruchi Sanghvi, Elena Silenok, Vanessa Hurst, and Hadi Partovi. Directed by Lesley Chilcott.
Well, Google certainly know how to develop game changers. Last April Google released a video showing off its new project, Google Glasses. It was pretty cool, but it did only really seem to be a phone screen for your eyes. But Google have just launched a new video, and i think have rebranded the concept as Google Glass.
The new video, as you expect does look great, tugging on the heartstrings with ideas of sharing and family. But lets really talk… This as a fundamental shift in how we are going to view, access and use information. It won’t be long until this is the form of contact lenses, and therefore seamlessly integrated into the Neo-Humanoid of the future. Kevin Kelly founding executive editor of Wired magazine and a former editor/publisher of the Whole Earth Catalog certainly thinks that this transgression to instant access is inevitable. And as he says,
“if you dont like it go and live in the woods”.
Make sure you check out his site here, as he is a true hero of mine.
Its odd as i totally agree with Kevin Kelly, this is inevitable. We are going to move to an information access age, where technology, education, and sharing are something the whole world is involved in. But is there a dark side to this aswel? In order for the Google Glass Project to make your day better than yesterday, it has to record your vision. Mmm. What if there is a crime, and the police need access to your field of the vision for the day. Do we all become walking CCTV cameras? Well, yes we do. But i suppose we need to stop being so individualistic and selfish, and think about the idea of forced evolution. Although i abhor the concept of collectivism as a means to socially and economically evolve (i am a true liberal and believer in Hayek) i think that the dissemination of information to the masses is only good for freedom, trade and human development. This growth of the single brain, synthetic telepathy and instant access to all of human knowledge is going to happen to one way or another. And, so long as the governments do not own this, and it is run privately through the markets then we are, as consumers, still in charge. Who knows, but its certainly going to be exciting. There is an old Chinese insult, that translates to
“May you live in interesting times”
Well… that we do.
Here is the new video about Google Glass
Here is the original video posted about Google Glasses
Well, this is a novel idea…. and one i love.
Definition: Gamification is the use of games thinking and game mechanics to solve problems and engage audiences.
From the days of finding every coin in Super Mario Bros (Explorers) to destroying all your friends in Goldeneye (Killers), Gamers have been slowly and surely watching, listening and taking notes to human behaviour whilst in Game mode. They know their stuff! Gamification is a new form of thinking, where people are funnelled into a fun Gaming environment that is aimed at maintaining your loyalty, and basically adding value to the customer experience. Gabe Zichermann talks of how brand loyalty has been overtaken by this phenomina, and people want to receive something for their loyalty predominantly in the form of status. What is status worth? Companies that dont see and aim to embrace this may miss out on a new method for customer and employee engagement.
There is a huge amount of information in this (so i am not even going to try and explain it too much), and it is well worth giving it one hour of your time. Beginning with Mary Poppins and talking through how air traffic control can be fun, this will make you think about your current working and customer environment. Truly inspirational, i will certainly find more from Gabe and other Gamification pioneers and post here.
Bill Gates is a good guy. Lets be honest. He is one the wealthiest people in the world, a true philanthropist and he has founded the Bill and Melinda Gates Foundation which believes all life on earth has equal right to equal opportunity and is dedicated to achieving this. They believe in optimism, rigour, innovation and collaboration to get there. Make sure you check out their website by clicking the link.
Bill understands that reducing the cost of energy and the carbon constraint is important for the development of the human race, and in particular this will assist in pulling the poorest in the world out of poverty. He pontificates we need to move towards near zero carbon emissions and suggests that we require one of five pariahs within the energy sector to materialise. He talks of carbon capture, batteries, alternative energy sources, fourth generation nuclear power plants, investment into renewables, good economics and innovation to get where we need to go.
Interestingly i was reading an article called Marketing Myopia by Theodore Levitt within the Harvard Business Review. He talks of dying industries, such as the Railroads, as they limited themselves by not understanding they were there to add value to customers. In it, he states that the ‘Oil’ businesses are in for a rough road, unless they expand their views to understand what they really give customers. I dont buy gas for my car, i buy the right to travel another 100 miles. Should these ‘Oil’ companies be focusing more on alternative sources of energy, becuase if they dont someone else will and then the ‘Oil’ industry might go the way of the railroad industry. Down.
I digress… watch video of Bill Gates to be inspired and hear about entrepreneurship in energy.
Why do some leaders and organisations inspire and some dont?
Simon Sinek offers a great talk with Ted Talks about ‘Why’, not how and what. Looking into the Law of Diffusion of Inspiration, and talking of ‘Crossing the Chasm’ to mainstream acceptance, Simon’s talk is well worth giving 18 mins of your time for.
Get the ‘How’ right, and you get the rest. Simon talks of communicating with the Innovators and Early Adopters and you get toward the 100th monkey syndrome. You reach the tipping point.
Click on this link to see the source of this image from Andre Ivanchuk.
Make sure you watch this, as i feel its very interesting when looking at getting new products and ideas into the market, and blows most ‘mainstream’ marketing companies out of the water. WHY WHY WHY!!
What do you consider to be the principal micro- and macro-economic forces driving change in the global economy in recent years and, using specific examples, explain why and how these forces have made global corporate management more complex?
This essay will isolate two key factors that influence micro and macro economic policies and how they make corporate management more complex. Technology is a micro-driver and I will illustrate how this affects the competitiveness of a firm. Globalisation is a macro-driver and I will highlight how this makes global management more complex as it has both expansionary and diminutive affects on trade and economic growth.
Writing, printing, and electricity are historical examples of technological development, and recent additions include the internet, lasers, mass production and flexible manufacturing (Malecki, 2002). Labour and capital have been the conventional inputs behind output expansion, but recent theoretical developments place innovation at the heart of microeconomic development (Helpman, 1998 & Grossman and Helpman, 1990). Porter goes on to argue that the competitive advantage of a firm arises from technology and the efficiency with which conventional inputs are utilised (Snowdon & Stonehouse, 2006). Porter explains that competitive advantage – developed within the framework of Porter’s Five Forces model (Porter, 2008) – is the fundamental factor attributing to microeconomic development, arising from strategies of innovation and development. For an overview see Appendix 1. Business strategy should focus on technological advances, and how this can further business efficiencies. Kodak was a victim of technological substitution, with the advent of digital technology and the rise of its competitor, Fujifilm (The Economist, 2012). Constant, exponential increases in technology require constant investment and management to maintain competitive advantage, thus making management more complex.
The Internet is arguably the most significant leading technology of recent era (Malecki, 2002), and creates complementary products that increase productivity (Helpman, 1998) but also competition by drastically reducing the marginal costs for production (Bakos & Brynjolfsson, 2000), thus market entry. The increase in e-commerce firms is an example, where barriers to entry are virtually zero. Managers must be sure to identify potential entrants and substitutive products early so as to plan effectively.
The need to use technology and innovate quickly is required to deal with the shifting paradigm of global competitiveness. Firms should gauge the affects technology has on the boundaries of both vertical and horizontal integration perhaps necessitating boundary redefinition to establish efficiency (Afuah, 2003). Understanding performance related affects of technology and in particular the Internet within organisations (Conner & Prahalad, 1996) is necessary. To assess the affect that technology has on the whole innovation chain, firms must note the effect technological change has on its suppliers (Brandenburger & Stuart, 1996). Firms should communicate with suppliers as businesses have become more inter-dependant, and collaboration via the value-chain should be considered. A strategist can gain a competitive edge for profits through the industry structure manifested through the elements of Porters’ Five Forces model (Porter, 2008), and utilise technology to achieve this.
Globalization enabling technologies include the Railroad, Steamship and the Telegraph. Open, free trade was characterised by Dennis Robertson (1940) as an “engine of growth” and globalizers have demonstrated higher growth rates (Bhagwati & Srinivasan, 2002). Since countries have shifted from inward to outward looking policies, we have seen an explosion in world trade. Bhagwati & Srinivasan (2002), argue that comparative advantage is key in explaining trade patterns and that freer trade should help in the reduction of poverty. Porter counters this argument suggesting the traditional trade theory based around land, labour and capital has limitations, because of the liquid capital market (Snowdon & Stonehouse, 2006). The international movement of large sums of money at the click of a ‘mouse’ has obvious implications for multi-nationals, as currency speculation can quickly alter trading environments and currency values, thus quickly changing costs of production and sale. Keniche Ohmae further alludes to the ‘Invisible Continent’ with visible, borderless and invisible worlds in our new economy, and that these new online businesses can acquire others to perpetuate growth without regulation by nation states. (Ohmae, 2000).
Porter stipulates that no longer the quantity of labour affects your competitiveness but rather the specialisation and quality of labour. Porter argues for the competitive advantage of nations by saying “National prosperity is strongly affected by competitiveness, which is the productivity with which a nation uses its human, capital, and natural resources” (Snowdon & Stonehouse, 2006). Krugman talks of a new economic geography, in which specialised clusters emerge within nation states (Krugman, 1994). Examples include financial sectors in London, technology clusters in Silicon Valley, and low-end apparel manufacture in China. Firms must understand location is a key component to their operations, and that varying the location of parts of the value chain may be more profitable. The iPod is assembled in many countries, before eventually being ‘made in china’. To ensure continual price competitiveness this complexity must be understood. Globalization has dramatically altered the volume of goods traded, due to such innovations as the ‘cargo container’, which has in turn led to vastly complex value chains.
There has been a tendency toward decentralisation around the world, and increased heterogeneity of preferences (Alesina, 2003). He implies that ethnic heterogeneity and even racial prejudice can interfere with the implementation of good growth enhancing policies. Therefore businesses must empathise with cultural norms in all countries in which the firm is to operate. Alesina goes onto articulate that bigger is not always better, and insinuates economic integration results in political disintegration. It is interesting to note current political debates in the Eurozone, aimed at increasing fiscal cohesion. Furthermore, Grossman & Helpman (1991) argue a link between trade intervention and long-run growth, thus suggesting globalization does not present the optimum. Krugman suggests that we require more global policy coordination to ensure long-term growth, such as with the Financial Transaction Tax (FTT). Firms must understand individual national policies and how these will affect trade and operations. If a firm’s objective is to maximize profit, then being ready to move operations based on national policies is vital.
It has been argued that globalisation has increased negative externalities, in particular environmental issues. However Porters’ competitive advantage model suggests that better resource productivity would offer an advantage of efficiency over competing firms, and that therefore increased globalisation might decrease pollution (Porter & Van der Linde, 1995). Companies should look at increased resource productivity as a method to make itself more competitive in the global market and thus decrease pollution, which adds complexity of externality management. Firms can measure their environmental impact, and use this as a ‘litmus test’ for production efficiency. Managers should promote an innovative working environment to further production efficiency. Utilising technological developments is one method of micro-economic change that affects macro-economies.
In conclusion, it can be seen that technology and globalization affect micro and macro-economies, and that both add to the complexity of corporate business management in a global world.
Porters Five Forces Model
Diagram 1: This diagram illustrates the key components of Porter’s Five Forces Model (Maxi-Pedia, 2012).
Porter’s Five Forces Model is a framework for industry analysis and the development of competitive strategy created by Michael Porter in 1979. It is used to assess the potential profitability of a market, and thus the attractiveness for investment. The process is used by business strategists when looking at new potential markets and businesses and is used to gauge the expected returns on investment. It should be used to shape strategy to increase company competiveness.
An unattractive market place is one where these factors combine to decrease potential profitability, where it approaches pure competition. In these instances one can only expect normal profits.
This model is more concerned with microeconomics where the focus is more local to business, rather than macroeconomic factors.
Afuah, A. (2003) Redefining Firm Boundaries in the face of the Internet: Are firms really shrinking?. Academy of Management Review [online]. 28 (1), pp. 34-53.
Alesina, A. (2003) The size of Countries: Does it matter?. Journal of the European Economic Association [online]. 1 (2-3), pp. 301-316.
Bakos, Y. and Brynjolfsson, E. (2000) Bundling and Competition on the Internet. Marketing Science [online]. 19 (1)
Barney, J. (1991) Firm Resources and Sustained Competitive Advantage. Journal of Management [online]. 17 (1), pp. 99-120.
Bhagwati, J. and Srinivasan, T.N. (2002) Trade and Poverty in the Poor Countries. The American Economic Review [online]. 92 (2), pp. 180-183.
Brandenburger, A.M. and Stuart, H.W. (1996) Value-based business strategy.Journal of Economics and Management Strategy [online]. 5, pp. 5-24.
Conor, K. and Prahalad, C.K. (1996) A resource-based theory of the firm: Knowledge versus opportunism. Organisation Science [online]. 7, pp. 477-492.
Grossman, G.M. and Helpman, E. (1990) Comparative Advantage and Long Run Growth.American Economic Review [online]. 80 (4), pp. 796-815.
Helpman, E. (1998) General Purpose Technologies and Economic Growth. [online].
Krugman, P. (1994) Complex Landscapes in Economic Geography. American Economic Review [online]. 84 (2), pp. 399-424.
Malecki, E.J. (2002) The Economic Geography of the Internet’s Infrastructure.Economic Geography [online]. 78 (4), pp. 399-424.
Maxi-Pedia (2012) Five Forces Model by Michael Porter. [online] Available from http://www.maxi-pedia.com/Five+Forces+model+by+Michael+Porter [Accessed 25 February 2012]
Ohmae, K. (2001) The Invisible Continent: Four Strategic Imperatives of the New Economy. : .
Porter, M.E. (1980) Competitive Strategy: Techniques for analysing industries and competitors. New York: Free Press [online].
Porter, M.E. (1995) Green and competitive: ending the stalemate. Harvard Business Review [online]. 73 (5)
Snowdon, B. and Stonehouse, G. (2006) Competitiveness in a globalised world: Michael Porter on the microeconomic foundations of the competiveness of nations, regions, and firms. Journal of International Business Studies [online]. 37 (2), pp. 163-175.
Porter, M.E. (2008) The Five Competitive Forces That Shape Strategy. Harvard Business Review [online]. 86 (1), p. 78.
The Economist (2012) The last Kodak moment. [online] January pp. ?-? Available from : http://www.economist.com/node/21542796 [Accessed 14 February 2012]
Well, i am not 100% sure this is the fight of the century, perhaps more the fight of all centuries. Another great take on the continuing battle between liberal Hayek economic theory and the Government intervention promoted by John Maynard Keynes.
This video has been put together by EconTalk‘s Russ Roberts and John Papola, and i strongly advise you get involved in the fantastic set of podcasts from Econtalk. check the website here http://www.econstories.tv.
Having balanced on the edge of the edge of a depression after the financial slump seen in 2008, there are still many questions being asked by economists and policy makers so as to speed up the recovery in many capitalist nations, as growth and employment are slow to recover than anticipated. Should we push for more fiscal stimulus, should spending be steered and from the top down or does prosperity come as green shoots from the bottom up?
Listen to this great rap video, to get a take on all these and more.